So desperate has the situation become that at the weekend, Pierre Achkar, chairman of the country's hotel owners' union, called on the government to act.

"Save tourism and the hotel industry before it is too late," he urged, "because the war in Iraq will have serious repercussions for all Arab countries, including Lebanon."

Achkar called for government subsidies to bolster the industry, claiming that "major hotels have recently encountered serious difficulties' and warning that "civil aviation is in a state of paralysis."

An AFP inquiry showed that hundreds of hotel employees, many of them from major international chains, have been laid off due to the low room occupancy rate.

The case of Sophie, receptionist in a luxury hotel, is typical.

Along with 100 or so colleagues, she was told by the manager that her services were no longer required, but she was politely told, "Leave your address, we'll be in touch when the customers return."

The manager of one establishment, who declined to be identified, admitted to having given dozens of employees what she euphemistically called "unpaid leave" due to the war.

"The Kuwaitis and Saudis who come here are staying away because of the pro-Iraqi climate of feeling in the country," she explained.

In addition, she said, "Western tour operators who in spring usually send thousands of French, German, British and Japanese tourists, have cancelled Beirut as a destination, along with the other countries of the Middle East," where public opinion is strongly anti-American and anti-British.

The dramatic drop in the number of visitors is graphically illustrated by the daily cancellation of flights by foreign airlines.

One Middle East Airlines (MEA) pilot said: "More often than not, flights are taking off less than a third or a quarter full."

Lebanese hoteliers and restaurateurs fear that the war could continue into the tourist season, with disastrous results for their summer takings.

Last summer, hundreds of thousands of Kuwaitis and Saudis, as well as visitors from Qatar and the United Arab Emirates, flocked to Lebanon to avoid Western destinations in the wake of September 11, 2001 attacks on New York and Washington and the subsequent anti-Arab hostility they engendered.

But tourist industry optimism that a return to the boom days before the 15-year civil war erupted in 1975 was premature.

"Attacks on American fast food chain restaurants and the support of the government for Iraq have given the impression that it is hostile to Arab countries in the Gulf which are cooperating with the US-British coalition and could deter their citizens from coming to Lebanon," one restaurateur said.

Even Syrians and Jordanians, normally frequent hotel guests in Lebanon, are thin on the ground this year, one hotel receptionist told AFP.

Similar problems are facing the business sector, which has invested millions of dollars in light industry in the hope of exporting to Iraq, and if the war goes on, it could spell ruin.

"Industrialists signed contracts worth a billion dollars with the Iraqi government in 2002 and they will find themselves with stock on their hands if the war continues too long," one businessman said.

He said last year 400 million dollars' worth of Lebanon's total one billion dollars of exports went to Iraq.

Added to that figure are some 200 million dollars' worth of re-exports by Syrian businesses of Lebanese produce and European goods imported via Lebanon for Iraqi clients.

"Hundreds of bottles of very old whisky, expensive Cognac and Bordeaux Grand Cru wines are sitting in my warehouse waiting for an Iraqi who has paid 100,000 dollars up front, to come and collect it," one importer said.

SPACE.WIRE